Equipment Financing Industry Confidence Increases in August

US Economy Currently in Fair Condition, Say 85.7% of Executives
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In ELFA's August confidence index, 89.3% of respondents believe business conditions will remain the same over the next four months. (shutterstock)

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Confidence in the prospects for the equipment finance market rose in August, with far fewer business leaders expecting weaker conditions, according to the Equipment Leasing & Finance Foundation.

The Washington, D.C.-based foundation’s August 2023 monthly confidence index, released Aug. 17, came in at 50.4, compared with 46.4 in July. The index provides a gauge of executives’ current sentiment and future expectations for the $1 trillion equipment finance sector.

Some 3.6% of the executives said they believe business conditions will improve over the next four months, a decrease from 7.7% in July, the foundation said.

However, 89.3% of the respondents believe business conditions will remain the same over the next four months, up from 65.4% the previous month, while 7.1% believe conditions will worsen, compared with 26.9% in July.

Around 3.6% of the executives evaluated the current U.S. economy as “excellent,” relatively unchanged from 3.9% the previous month, the foundation said. Some 85.7% of the leadership evaluated the current U.S. economy as “fair,” up from 80.8% in July, and 10.7% evaluate it as “poor,” a month-over-month decrease from 15.4%.

Some 10.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 11.5% in July, but 60.7% said the U.S. economy will “stay the same” over the coming six months, an increase from 53.9% in July. Some 28.6% believe U.S. economic conditions will worsen over the next six months, a decrease from 34.6% the previous month.

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This sentiment is backed up by more positive federal data. The U.S. Census Bureau said Aug. 16 housing starts rose 3.9% compared with June and were up 5.9% compared with the same month a year earlier. This strength was built on single-family housing starts, which were up 6.7% compared with July 2022.

In addition, the Federal Reserve Aug. 16 said July total industrial production rose 1% after decreasing in the prior two months. Also, manufacturing output rose 0.5% in July, the production of motor vehicles and parts jumped 5.2%, while factory output elsewhere edged up 0.1%, the Fed said.